Transcendia Announces Significant New Capital Investment to Support Next Phase of Growth and Value Creation Initiatives

Rhea-AI Summary

Transcendia Holdings, Inc. announces a recapitalization transaction providing $114 million in new capital, eliminating over $200 million in debt, and strengthening its competitive position. Industrial Opportunity Partners becomes majority shareholder with Goldman Sachs Asset Management retaining a significant minority stake. The transaction supports Transcendia's growth strategy, cost structure improvements, facility optimization, and expansion into new markets.

Positive

• Recapitalization transaction providing $114 million in new capital.

• Elimination of over $200 million in debt.

• Strengthening of Transcendia's competitive position in the market.

• Support for growth strategy, cost structure improvements, and facility optimization.

• Expansion into new markets with improved barrier film manufacturing capabilities.

Negative

• None.

Recapitalization Transaction Provides $114 Million in New Money Financing and More Than $200 Million in Total Debt Reduction

 Industrial Opportunity Partners to Become Majority Shareholder with Goldman Sachs Asset Management Retaining Significant Minority Ownership 

FRANKLIN PARK, Ill., May 2, 2024 /PRNewswire/ -- Transcendia Holdings, Inc. ("Transcendia" or the "Company"), a leader in manufacturing and converting custom engineered films, today announced it has entered into an agreement for a recapitalization transaction that will strengthen the Company's financial position and create a sustainable, long-term capital structure for the next phase of growth. The transaction will provide Transcendia with $114 million in new capital, eliminate more than $200 million of the Company's debt and further strengthen Transcendia's competitive position in the market with additional operating resources.

Under the terms of the agreement, an investment fund managed by Industrial Opportunity Partners ("IOP") and investment funds managed by Goldman Sachs Asset Management will lead the capital infusion and recapitalization, which has received unanimous support from the Company's existing second lien lenders and is further supported with a new first lien credit facility from General Atlantic Credit's Atlantic Park Fund. As a result of the transaction, IOP will assume majority ownership of Transcendia, while Goldman Sachs Asset Management, its existing equity sponsor, will maintain a significant minority stake.

"This transaction provides us with additional capital and financial flexibility to continue building upon the significant progress we have made on several transformational initiatives to improve our cost structure, optimize our facility footprint and grow our business. Our 2021 $40 million expansion in our Hebron, Ohio facility increased our barrier film manufacturing capabilities for biopharmaceutical, food and beverage, and specialty industrial packaging, allowing us to expand into new markets and serve new customers," said John Bagnuolo, President and CEO of Transcendia. "This investment is a vote of confidence in our Invest to Grow strategy, our capabilities and our team. We look forward to having the support and operating resources of IOP, in addition to continuing our partnership with Goldman Sachs Asset Management."

"Transcendia is a leading, global film manufacturer and converter with a strong, resilient business, and the Company is well-positioned for continued profitable growth," said Kyle Kirk, Director at IOP. "We are confident in the leadership team's ability to continue executing the business transformation, delivering consistent, high-quality products and service to customers, and realizing various value-creation opportunities. In addition, we look forward to providing the Company with additional resources to accelerate its momentum and expansion into additional growth markets."

"We commend John and the entire Transcendia management team for all they have accomplished to reposition and strengthen the business," said Simon Kubbies, Managing Director at Goldman Sachs. "We are pleased to continue our partnership with Transcendia as the Company builds upon its existing infrastructure, capabilities and talent to provide customers with solutions for more demanding and challenging barrier packaging applications."

Advisors

Fried, Frank, Harris, Shriver & Jacobson LLP is serving as legal advisor to Transcendia. Winston & Strawn LLP is serving as legal advisor to IOP. Greenberg Traurig, LLP is serving as legal advisor to Goldman Sachs Asset Management. Guggenheim Securities, LLC is serving as financial advisor to the existing second lien lenders, and Simpson Thacher & Bartlett LLP and Proskauer Rose LLP are serving as legal advisors to the existing second lien lenders. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal advisor to General Atlantic Credit.

About Transcendia

Transcendia, Inc. is a leader in manufacturing and converting custom engineered materials designed to protect products and keep people safe and healthy. The company serves over 2,300 customers globally who rely on its broad material science expertise, extensive technology platform and best-in-class quality systems for their most complex application needs. Founded in 1931, Transcendia has decades of experience working collaboratively with customers to develop film solutions for the healthcare, food and beverage, specialty industrial, and print and publishing end markets. Headquartered in Franklin Park, IL, Transcendia operates 14 manufacturing facilities and three distribution centers globally. To learn more, please visit www.transcendia.com.

About Industrial Opportunity Partners

Industrial Opportunity Partners, an Evanston, Ill.-based private equity firm with over $1.5 billion of committed capital since inception, is dedicated to creating value through investing in manufacturing and value-added distribution businesses with sales between $50 million and $500 million. IOP focuses on businesses with strong product, customer, and market positions, and provides management and operational resources to support sales and earnings growth at its businesses. For more information, visit IOP's website at www.iopfund.com.

About Goldman Sachs Alternatives

Goldman Sachs (NYSE: GS) is one of the leading investors in alternatives globally, with over $450 billion in assets and more than 30 years of experience. The business invests in the full spectrum of alternatives including private equity, growth equity, private credit, real estate, infrastructure, sustainability, and hedge funds. The business is driven by a focus on partnership and shared success with its clients, seeking to deliver long-term investment performance drawing on its global network and deep expertise across industries and markets. The alternative investments platform is part of Goldman Sachs Asset Management, which delivers investment and advisory services across public and private markets for the world's leading institutions, financial advisors and individuals. Established in 1986, Private Equity at Goldman Sachs Alternatives has invested over $75 billion since inception. The business combines a global network of relationships, unique insight across markets, industries and regions, and the worldwide resources of Goldman Sachs to build businesses and accelerate value creation across its portfolios. Follow us on LinkedIn.

About General Atlantic Credit

General Atlantic Credit ("GA Credit") is the dedicated credit investment platform within General Atlantic, a leading global growth equity firm. GA Credit leverages a demonstrated track record of strategic credit partnerships across market cycles and capital structures alongside General Atlantic's more than 40 years of domain expertise and company-building capabilities. GA Credit's Atlantic Park strategy provides flexible capital to high-quality companies seeking a strategic partner at various stages of the corporate and economic lifecycle. This partnership approach enables Atlantic Park to create customized capital solutions tailored to a company's specific capital needs. General Atlantic has approximately $84 billion in assets under management inclusive of all products as of March 31, 2024. For more information, please visit: www.generalatlantic.com.

Transcendia
Michael Freitag / Tim Ragones / Haley Salas
Joele Frank, Wilkinson Brimmer Katcher
+1-212-355-4449

Industrial Opportunity Partners
Bob Vedra / Kyle Kirk
+1-847-556-3460
bvedra@iopfund.com / kkirk@iopfund.com

Goldman Sachs
Mary Athridge
+1-212-934-0567
mary.athridge@gs.com

General Atlantic
Emily Japlon / Sara Widmann
media@generalatlantic.com 

View original content:https://www.prnewswire.com/news-releases/transcendia-announces-significant-new-capital-investment-to-support-next-phase-of-growth-and-value-creation-initiatives-302134754.html

SOURCE Transcendia, Inc.

FAQ

What is the purpose of the recapitalization transaction announced by Transcendia?

Transcendia announced a recapitalization transaction to strengthen the Company's financial position, create a sustainable capital structure for growth, and eliminate over $200 million in debt.

Who will become the majority shareholder of Transcendia as a result of the transaction?

Industrial Opportunity Partners will become the majority shareholder of Transcendia.

What is the role of Goldman Sachs Asset Management in the recapitalization transaction?

Goldman Sachs Asset Management will retain a significant minority stake in Transcendia.

How much new capital will Transcendia receive through the transaction?

Transcendia will receive $114 million in new capital through the recapitalization transaction.

What improvements did Transcendia make in its Hebron, Ohio facility in 2021?

Transcendia expanded its barrier film manufacturing capabilities in its Hebron, Ohio facility to serve new markets such as biopharmaceutical, food and beverage, and specialty industrial packaging.